ECB Governing Council member Cazacs: Don’t rush to cut interest rates after June

ECB Governing Council member Martins Kazaks said the pace of ECB interest rate cuts must match the gradual slowdown in euro zone inflation.

ECB Governing Council member Martins Kazaks said that the pace of ECB interest rate cuts must match the gradual slowdown in inflation in the euro area.
The Latvian official said June seemed like the right time to start lowering borrowing costs, but any subsequent steps would best be determined by data.
The baseline scenario shows that we are gradually getting closer to the 2% inflation target. This of course means that we can gradually start to lower interest rates, Kazaks said.
This process must be cautious and step-by-step. It cannot be rushed.
From today’s perspective, June is likely to be the time when we start cutting interest rates, Kazaks said.
After June, look forward, he added. Let\’s look at the data again.
He pointed out that the European Central Bank\’s approach of reviewing the data and then making decisions meeting by meeting has been appropriate so far.
Given that uncertainty remains high, very clear forward guidance is not a good policy solution at the moment.

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